Early Impact of the CHIPS Act

The CHIPS Act was driven in part by concerns among U.S. policymakers that the U.S. semiconductor industry had fallen behind other modern manufacturing hubs, primarily in East Asia (e.g., South Korea, Taiwan, and, to some extent, China). See, id. at 2. In light of these concerns and others, the Act was structured in large part to provide incentives and financial resources to companies who wished to expand or develop semiconductor manufacturing operations in the United States. See, id. at 6 – 10. To this end, the Act earmarked up to $38.22 billion to provide financial incentives to build, expand, and equip U.S.-based semiconductor fabrication plants, as well as other manufacturing facilities, necessary for the overall supply and value chain (e.g., packaging). See, id. at 14, 16.

The executive branch began implementing the Act soon after its passage by setting up a structure for companies to apply for financial support. In September 2022, the Department of Commerce formed the Industrial Advisory Committee (led by executives from Applied Materials and Analog Devices), whose mandate was to provide the Department with general strategic advice on the domestic semiconductor industry. By February 2023, the Department had published the first Notice of Funding Opportunity, providing concrete guidance to industry partners on how to apply for funding. See, id.